A)

A local company received its bank statement dated June 30, 2022, and reconciled its statement balance to June 30, 2022, balance in its cash account (balance $5,800). This bank reconciliation recognized the following items:

1. Deposits in transit $3,100.
2. Outstanding cheques $4,000.
3. Bank service charges $100.
4. An NSF cheque in the amount of $700.
5. It was found that a cheque in the amount of $560 was incorrectly recorded as $650.

1. What was the balance in the local companys cash account before the bank reconciliation was completed?
2. What was the balance shown on the bank statement before recognizing any of the preceding items (1-5).

B)

A local firm issues two bond as follows:

Bond A

$5,000,000 par value with an 8% coupon rate. The yield-to-maturity on bonds at the time that this bond is issued is 10%. The bond has a term of 10 years.

Bond B

$50,000,000 par value bond with an 12% coupon rate. The yield-to-maturity on bonds at the time that this bond is issued is 10%. The bond has a term of 10 years.

1. What is the price of Bond A?
2. What is the general journal entry to record the issuance of Bond A?
3. What is the price of Bond B?
4. What is the general journal entry to record the issuance of Bond B?
5. Does bond discount increase or decrease the total amount of interest expense that will be recognized in future years? Provide an explanation to justify your answer.